Cencora, Inc. Annual Report - How They Did This Year

Hey there, fellow investor! Let's take a look at how Cencora, Inc. performed in their fiscal year ending September 30, 2025. It's been a busy year with some solid growth and a notable acquisition.

Overall Performance: Steady Growth in a Dynamic Market

Cencora continued to grow its business this year. The company brought in roughly $260 billion in sales for fiscal year 2025. That's a healthy 7% increase compared to the $243 billion they made last year (FY2024). This follows a similar growth trend from FY2023 to FY2024, where sales also grew by about 6.6%.

However, the costs to deliver these products (Cost of Sales) also went up, reaching $257.6 billion this year, an increase of about 7.15% from last year's $240.4 billion. This means that while sales are growing, the direct costs associated with those sales are growing at a similar pace.

Shipping and handling costs also saw an increase, hitting $1.2 billion this year, up from $1.1 billion last year. This is a 9% jump, indicating higher logistics expenses.

Interestingly, the company reported $100 million in "other income" for the third year in a row.

Breaking Down the Business: US vs. International

Cencora operates in two main areas:

• US Healthcare Solutions: This segment saw sales climb to $230 billion in FY2025, a nearly 7% increase from $215 billion last year. This is their biggest market and continues to be a strong driver of growth.
• International Healthcare Solutions: This part of the business also grew, reaching $30 billion in sales for FY2025, up about 7.1% from $28 billion in FY2024.

Both segments are showing consistent growth, which is a good sign that demand for their services is strong across different regions.

Key Developments & Strategic Moves

Cencora made a significant move this year by acquiring Retina Consultants of America (RCA) on January 2, 2025. They've set aside about $100 million in potential future payments (called "contingent consideration") related to this deal, which means they might pay more if RCA hits certain performance targets.

Looking back a bit, Cencora also formed a joint venture called OneOncology in June 2023, investing $1 billion into it. This venture is still part of their portfolio as of this year, showing their continued commitment to oncology care. They also acquired PharmaLex in January 2023, further expanding their services. These moves indicate a strategy of expanding into specialized healthcare areas and services beyond just distribution.

Financial Health: Debt and Customer Relationships

The company has a substantial amount of debt, including $1 billion in notes payable to banks and approximately $7.05 billion in various senior notes (long-term loans with different interest rates and maturity dates) as of September 30, 2025. They have not drawn on their revolving credit or receivables securitization facilities.

A significant point for investors is customer concentration. Cencora relies heavily on a few large customers:

• Walgreens and Boots UK Ltd accounted for 20% of their total sales revenue and 20% of their outstanding customer payments (accounts receivable) in FY2025.
• Evernorth Health Services made up 10% of their total sales revenue and 10% of their accounts receivable.

This means that a substantial portion of Cencora's business comes from just two customers. While these are large, stable companies, it does present a risk factor: if either of these relationships were to change significantly, it could have a noticeable impact on Cencora's financial performance.

What's Next?

The acquisitions and joint ventures suggest Cencora is actively looking to diversify and strengthen its position in specialized healthcare markets. The consistent growth in both US and International segments indicates a stable core business.